What is bribery?
Bribery is the act of offering a gift or advantage in order to induce someone to act in a way that breaches the law or is dishonest. The gift does not have to be monetary; it can include any kind of benefit such as hospitality, a favour or other type of “undue reward”. Not every gift or reward is considered a bribe.
Examples of bribery include:
- Paying an RMS employee to let you cheat on a driving test.
- Paying a customs official to speed up the passage of goods through a port.
- Employing a public official’s son to influence the award of contracts.
- Paying the travel expenses of doctors to convince them to prescribe certain products.
What is corruption?
Transparency International defines corruption as the “abuse of entrusted power for private gain”. Corruption occurs when someone who has been granted official powers, either public or private, exploits them for his or her own benefit. Bribery is a common type of corrupt conduct. Other examples include embezzlement and extortion.
Corruption and international law
Corruption has devastating global consequences. It erodes trust in the public sector, weakens democracy and slows economic development. It is in the interest of all nations to respond to the threat posed by corruption and enhance anti-corruption frameworks within their political and legislative systems.
The United Nations Convention against Corruption (UNCAC) is the only binding international treaty dealing with corruption. The UNCAC covers five main issues:
- Preventive measures directed at both the public and private sectors.
- Criminalisation and law enforcement.
- International cooperation.
- Asset recovery aimed at returning assets to their rightful owners.
- Technical assistance and information exchange.
The vast majority of United Nations member states are party to the convention, and Australia ratified the UNCAC in 2003.
Other important anti-bribery Conventions include the Organisation for Economic Cooperation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. This Convention aims to suppress bribery in the international corporate sphere.
Commonwealth laws against bribery
Commonwealth laws in Australia such as the Criminal Code Act 1995 (Cth) criminalise corrupt conduct both domestically and internationally.
Section 141 of the Criminal Code makes it an offence for a person to dishonestly provide, offer, or cause a benefit to another person with the intent to influence a Commonwealth public official in the exercise of the official’s duties.
Under section 141.1(3), it is also an offence if a Commonwealth public official dishonestly asks for, receives, or agrees to receive a benefit for themself or another person, and does so with the intention that the exercise of his or her official duties will be influenced. It is also an offence for a Commonwealth public official to ask for, receive, or agree to receive a benefit with the intention of inducing, fostering, or sustaining a belief that the exercise of the official’s duties will be influenced.
An individual could be liable under this provision for conduct that takes place overseas, so long as it involved a Commonwealth public official.
Section 70 of the Criminal Code criminalises the bribery of foreign public officials. Under this section, it is an offence to:
- Provide, offer, or cause a benefit to be provided to another person,
- Where that benefit is not legitimately due to that person,
- With the intent to influence the exercise of a foreign public official’s duties,
- In order to obtain business or a business advantage.
Proposed new corporate offence of failure to prevent foreign bribery
On 2 December 2019, the Australian Government introduced the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 into Parliament.
The Bill proposes a new corporate offence for failure to prevent foreign bribery by an associate of a body corporate. However, the offence will not apply if the corporation can show it had adequate procedures in place designed to prevent the commission of foreign bribery.
The government developed a draft adequate procedures guidance and invited interested parties to provide feedback by 28 February 2020. A final version of the guidance addressing the feedback received is to be published before the new corporate offence for foreign bribery commences. However, as of April 2022, the Bill is still before the House of Representatives and has not yet passed into law.
Defences: Facilitation payment
A facilitation payment is a minor payment made to a foreign public official for the purpose of speeding up minor routine government action and is recognised under Australian law. Such a payment is legislatively recognised in Australia as a complete defence to the core foreign bribery offence in the Criminal Code Act 1995. However, it is recognised that differentiating between a facilitation payment and a bribe can be difficult.
For individuals, both domestic and foreign bribery carry a maximum penalty of 10 years imprisonment or a fine of 10,000 penalty units. Under section 4AA of the Crimes Act 1914 (Cth) a penalty unit is $222 from 1 July 2020, so the maximum fine is $2,220,000.
For corporations, the maximum penalty is a fine not more than the greatest of the following:
- A fine of up to 100,000 penalty units ($22,200,000), or
- Three times the value of the benefit (if it can be determined), or
- If the value of the benefit cannot be determined, 10 per cent of the annual turnover of the company during a 12-month period (concluding at the end of the month in which the offending conduct occurred).
NSW laws against bribery
Part 4A of the Crimes Act 1900 (NSW) was designed to deal with corruption in the private sector, but in effect also criminalises a range of bribery offences, both public and private.
Under section 249B it is a crime for an agent to receive or solicit, or for a person to give or offer, any benefit in the following circumstances:
- As an inducement or reward for doing something or showing favour to any person in relation to the agent’s affairs or business, or
- Where the receipt of the benefit would “tend to influence” the agent to show favour to any person in relation to the agent’s affairs or business.
The term “agent” includes but is not limited to:
- Any person employed by or acting on behalf of another person,
- Any person serving under the Crown,
- A police officer, or
- A councillor under the Local Government Act 1993 (NSW).
Even if the benefit was not offered specifically as an inducement or reward, but would “tend to influence” the agent, the person could still be found guilty.
In both instances, the maximum penalty is seven years imprisonment.
Common law offence of bribery
The common law offence of bribery is committed by the receiving or offering of an undue reward by or to any person in public office, in order to influence that person’s behaviour, and to incline that person to act contrary to accepted rules of honesty and integrity. This can apply with the mere offer of a corrupt inducement, even if the offer is rejected.
Common law bribery can also occur by the making or offering of a payment with an intent to incline a person in public office to disregard his or her duty at some future time. The occasion for the disregard of duty need not have arisen at the time of the offence, and it need never arise.
One way of strengthening anti-bribery measures is to introduce protections for those who expose corrupt conduct. The Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 took effect in 2019 to strengthen whistleblower protections in the following Commonwealth legislation:
- The Corporations Act 2001 – to consolidate and broaden the existing protections and remedies for corporate and financial sector whistleblowers.
- The Taxation Administration Act 1953 – to create a whistleblower protection regime for disclosures of information by individuals regarding breaches of the tax laws or misconduct relating to an entity’s tax affairs.
- The Banking Act 1959, Insurance Act 1973, Life Insurance Act 1995, and Superannuation Industry (Supervision) Act 1993, to make consequential amendments.
Combatting bribery in business
According to an OECD paper on this topic, common managerial approaches to combatting bribery include having clear, detailed codes of conduct, financial record keeping, statements by executive officers, internal monitoring, whistle-blowing facilities, creation of compliance offices, and taking disciplinary action.